New South Wales Supreme Court CITATION : Wollstein v Dredeco & Anor [2000] NSWSC 1027 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 20015 of 1996 HEARING DATE(S) : 1-2 November 2000 JUDGMENT DATE : 2 November 2000 Robert Wollstein (Plaintiff) PARTIES : v Dredeco Pty Limited (First Defendant) Tideway B.V. (Second Defendant) JUDGMENT OF : Brownie AJ Mr R McLoughlin SC/Mr Tim McKenzie (Plaintiff) COUNSEL : Mr C Hoeben SC (First Defendant) Mr J McIntyre SC (Second Defendant) Jones Staff & Co (Plaintiff) SOLICITORS : Pieterse & Pieterse (First Defendant) Norton White (Second Defendant) CATCHWORDS : No question of principle. LEGISLATION CITED : Workers' Compensation Act 1987, s 149, s 151G. CASES CITED : Husher v Husher [1999] HCA 47. DECISION : See Paragraphs 32-35. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION BROWNIE AJ THURSDAY 2 NOVEMBER 2000 20015/96 - ROBERT WOLLSTEIN v DREDECO PTY LTD & ANOR JUDGMENT 1 HIS HONOUR: The plaintiff sues the defendants for damages for personal injuries sustained in an accident which occurred on 1 February 1993. He was, at the time, a master of a tug called the Dampier, and was employed by the first defendant. The Dampier, in effect, acted as the work boat for a non-self-propelled dredge called the Vlaanderen XI. That dredge was engaged in dredging work in Botany Bay in relation to the then proposed construction of the third runway at Sydney Airport. 2 At about 3.30am the plaintiff moved from the Dampier to the dredge as part of his ordinary working activity in order to receive instructions from the dredge master as to what needed to be done next. He was sitting in the bridge or control room of the dredge when the accident happened. 3 The dredge in question was owned by a Belgian company, Baggerwerken Decloedt En Zoon NV. By a charter party, the Belgian company chartered the dredge to the second defendant for a period of 24 months commencing on 1 October 1992. By a further charter party, the second defendant subchartered the same vessel to the first defendant for the same period. It is apparent from the face of the two charter party agreements that they were prepared at or about the same time and obviously as part of some single commercial project. Each is a charter by demise and they are in substantially identical terms. Each document contained an acknowledgment by the respective parties that the vessel was in good condition at the time of the commencement of the charter. 4 Each agreement required the charterer, at its expense, to maintain the vessel generally and to proceed with the daily maintenance of the vessel in a certain way. Each agreement required the owner, that is to say the Belgian company in the first agreement and the second defendant in the second agreement at its expense to supply certain staff crew, and required the charterer, at its expense, to procure additional crew members. The staff crew specified included in each case two dredge masters, a chief engineer, two electricians and two first engineers. 5 The equipment on the dredge included a winch used to raise and lower a ladder mechanism to which there was attached certain dredging equipment. The weight to be raised and lowered was approximately 450 tonnes so that the winch and its associated braking equipment were items of quite substantial equipment. 6 The braking system on the winch need not I think be described in detail. There were two brakes provided, described as the port brake and the starboard brake. Each brake had both electrical and mechanical means of control and operated by applying friction to a rotating shaft. For some days before the accident, the brakes had not been functioning correctly. When they were applied, the brakes did not stop the winch immediately. There was some continued creep and, over a period of days, the extent of the creep increased. 7 On the occasion of the accident, the brakes failed, with the result that the ladder mechanism fell at a speed suggesting that the fall was unobstructed, although that probably was not true. Obviously enough the brakes were applied to the rotating shaft, but did not restrain it in any real sense at all. Again what followed seems to me to be something which need not be described now in detail. Part of the port brake system disintegrated, violently expelling large pieces of metal. One such piece of metal penetrated the roof of the compartment in which the winch was housed, so that the flying metal then penetrated the floor of the bridge and ultimately came to rest in the roof of the bridge. On the way, that piece of flying metal inflicted a gross injury upon the plaintiff's foot, in substance traumatically amputating most of it. 8 Nothing could be plainer than that the accident occurred by reason of the negligent failure of the first defendant to properly maintain the winch and associated mechanisms and to react to various warning signs indicating that there was a problem. At this stage the first defendant does not dispute its liability. The real issue in the case, indeed the only issue apart from some relatively minor questions about the measure of damages, is whether the plaintiff has established a case against the second defendant. If so, the first defendant is admittedly liable to indemnify the second defendant against the second defendant's liability to the plaintiff. 9 The point to all this is that if the plaintiff succeeds as against the second defendant, he is entitled to damages assessed according to the rules of the Common Law, whereas as against the first defendant, he is entitled to damages measured only in the manner prescribed by the Workers' Compensation Act 1987, that is, to a significantly lesser sum. 10 As between the plaintiff and the second defendant the question is one of negligence according to ordinary principles. It is, I think, perfectly clear that as between the defendants, the first defendant took the dredge on charter from the second defendant on a charter by demise, so that the first defendant alone bears all relevant responsibility. But as between the plaintiff and the second defendant, the position has to be judged from a different viewpoint. Relevantly the second defendant was the charterer of the vessel from the Belgian company which owned it, but in turn it subchartered the vessel to the first defendant. 11 Undoubtedly the second defendant owed a duty of care towards members of the public who might be affected by its conduct in relation to the dredge and that duty of care extended to people such as the plaintiff. The question is whether that duty was breached in any way causally connected with the plaintiff's accident. 12 The plaintiff points to the provisions of the charter party between the defendants which I have mentioned. The plaintiff submits that the appropriate inference to be drawn is that the members of the staff crew, mentioned in the charter party between the defendants, were employees of the second defendant, or that they worked under the direction of employees of the second defendant, so that their negligence is the negligence of the second defendant. 13 The plaintiff pointed to the reports reproduced in exhibit F. The circumstances in which the second defendant answered a call and produced the documents which are now exhibit F, are recorded on page 2 of the transcript. There is, I think, no other real evidence on the subject. The plaintiff contends for a conclusion that those circumstances demonstrate a knowledge on the part of the second defendant of the defects in the maintenance procedures adopted in relation to the dredge, followed in terms of logical steps by the proposition that the second defendant had the opportunity to cure those defects and therefore the obligation to cure those defects. 14 I do not think that the inference contended for can be drawn on the evidence. I do not think one can properly infer that the members of the staff crew mentioned were employees of the second defendant in any relevant sense. For all that the evidence establishes, they may have been employees of the Belgian company which owned the dredge, or they might have been employed by someone or some company using the vessel in Singapore before it was chartered to the second defendant and subchartered to the first defendant. They might have been employed by some Australian company who provided the employees. There are doubtless other possibilities. 15 The plaintiff also contended for a conclusion that the second defendant knew or, I suppose, ought to have known at the time of the charter party between the defendants, of the condition of the vessel. As against that, both charter party agreements contain acknowledgments by all concerned that the vessel was then in a good condition. I do not think there is evidence that at that time the vessel was other than in good condition. There is evidence that more modern vessels contain other equipment, best described I suppose, as more modern equipment. But all that the evidence establishes as against the second defendant is that it took the dredge on charter at a time when it was already some 15 years old and at a time when the parties acknowledged that the dredge was in good condition. 16 The plaintiff contended that the second defendant ought to have known that the dredge did not contain various items of equipment which would have alerted the first defendant or its employees to defects in the winch and associated equipment. Assuming that the second defendant ought to have known that much, there are I think two problems in that part of the plaintiff's case. First, the second defendant, as I have said, took a 15 year old dredge on charter with the acknowledgment I have mentioned and that really is as far as the evidence goes on that topic. Secondly, as the second defendant submits, on the evidence it is difficult, if not impossible, to see that there is any causal connection between any supposed breach in this context and the plaintiff's loss. If the first defendant's employees failed to notice or, having noticed a creep in the winch in the few days which preceded the plaintiff's accident, failed to do something suitable about that creep, I do not think the inference can be drawn that those same employees would have done something, or something more effective, if given a second warning of the same problem. 17 For those reasons I conclude what the plaintiff's claim against the second defendant should fail. I record that earlier this afternoon the second defendant sought an adjournment in order to call further evidence as to the relationship between itself and its supposed employees. Because of the conclusion I have just expressed, I do not think it is appropriate to adjourn the trial for that purpose at this stage. It would simply be incurring extra costs inappropriately. 18 I turn to the measure of the plaintiff's damages as against the first defendant. The plaintiff has proffered an amended schedule of damages which helpfully sets the matter out in various categories. The first item is the amount payable under s 151G of the Workers' Compensation Act for damages for non-economic loss, as that term is defined in s 149. The extent of the plaintiff's disfigurement can be readily seen in the photographs which are exhibit G. It is, it seems to me, quite a gross disfigurement. 19 There is really little or no dispute between the doctors, and the plaintiff was scarcely cross-examined at all about his pain and suffering, or the loss of amenities of life. Nobody suggests that there is any loss of expectation of life. The injury is a severe one. In address Mr Hoeben of senior counsel referred to the plaintiff's returning to work as heroic. It was. It is very much to the plaintiff's credit that he has returned to work at all, that he has remained at work and that he has gone to sea. 20 Doing the best I can, it seems to me that the appropriate figure is 60 per cent of the agreed sum of $212,750. Past out of pocket expenses are agreed at $46,691. Future out of pocket expenses are agreed at $79,852.50. 21 There is a dispute as to the proper sum to be awarded for past economic loss and for interest on that sum. It is agreed that during the period of approximately 18 months after the accident when the plaintiff was unemployed, his net loss of income was, in round figures, $73,000. The area of dispute here relates to the succeeding period of approximately six years. The plaintiff has been employed for virtually the whole of that period. He agreed in cross-examination that the work that he had in fact been doing over this period was, in broad general terms at least, substantially similar to the general character of work that he was doing before he obtained his job as tug master on the Dampier. 22 Throughout the period of his employment on the Dampier and for the period during which it should be taken he would have continued to work on the Dampier, but for the accident, he earned, it is common ground, a good deal more money than he had been earning in the past and that he has been earning since resuming work in 1994. The first defendant contends that there should be a finding that when the job on the Dampier ceased, the plaintiff would probably have returned to an earning level approximating to his earnings during the period immediately preceding employment on the Dampier and approximating to his earnings since 1994. 23 Whilst the plaintiff's evidence in cross-examination that I have summarised gives substantial support to that view, it does, I think, not give the plaintiff adequate compensation for the prospect that he might have been able to obtain, or keep, work at a higher level. His obtaining employment on the Dampier represented a form of promotion, for want of a better word, of doing a more highly paid class of work and it represented, I should think, something which would have stood him in good stead in applying for work in the future, looking at the position as at the date of his injury. 24 But for the injury, he would then have been in a position where he could have told potential future employees of his experience on the Dampier and of his earnings at that point. It would, at the very least, have put him in a better bargaining position with potential employers and might perhaps have led to better things. In any event, it seems to me it is appropriate to give him some round sum of money and doing the best I can with the evidence, I think that the right figure is $25,000 for that period. Interest should be calculated at the appropriate rate on those two sums of $73,000 and $25,000. 25 The next item is future economic loss. The plaintiff initially contended for the award of a sum of $91,000 odd, representing $167 per week net for 19 years on the 5 per cent actuarial tables, together with an additional sum of $150,000 for diminution of earning capacity. The plaintiff subsequently conceded that it was appropriate to reduce the sum of $167 per week by about $35 per week, reflecting a promotion which it is likely the plaintiff is about to receive in his present employment. 26 The first defendant submitted, and I accept, that to approach the matter in the way contended for by the plaintiff represents an elision between separate concepts which is impermissible and it reminded me of the recent High Court decision in Husher v Husher. It seems perfectly plain that I should proceed to assess damages in accordance with the principles discussed in that case, that is to say, awarding the plaintiff damages for diminution in his earning capacity which is or might be productive of financial loss and that in this regard I should focus on the facts of the particular case, considering it individually and not as one of a class of cases. 27 What I have said about the plaintiff's past economic loss is, broadly speaking, appropriate as regards future economic loss. It is clear that he has a real incapacity to do physical work. Whilst he has until now remained in continuous work, he seeks compensation on the basis that that might not continue, or that whilst it continues, there will be breaks in it and perhaps more significantly, that as time goes by, it may be that he will be unable to find continued work in the relatively highly paid employment that he has enjoyed in the past and is enjoying now. 28 The industry is a declining one and his present employer, a Queensland government instrumentality, is apparently contemplating privatizing the services which it provides and in relation to which he is employed. I think it would be unrealistic also to ignore the likelihood that with increasing age he might find it more difficult to continue to endure his disabilities and that employers might be less enthusiastic about employing him. 29 Recognising that I might be accused of a judgment of Solomon, it seems to me that what the plaintiff asks for is too much. The first defendant submitted that a figure of $150,000 overall was appropriate. I have come to the view that the appropriate figure is $200,000. 30 There are then claims for loss of superannuation, both past and future. Those sums should be recalculated. 31 Finally, the parties agree that the relevant sum to be awarded in what is conventionally called the Fox v Wood component is $5,138.04. From the aggregate of all these sums there should be deducted the Workers' Compensation payments made to date. ARGUMENT AS TO COSTS 32 HIS HONOUR:I give judgment for the plaintiff against the first defendant for $474,277.52. I grant liberty to either party to apply upon seven days notice if any question arises as to the calculation of that sum. I order the first defendant to pay the plaintiff's costs. I give judgment for the second defendant against the plaintiff with costs. I dismiss each cross-claim with costs. 33 The plaintiff asks for a Bullock order in respect of the costs ordered to be paid by him to the second defendant. The first defendant resists that, indicating that the plaintiff sued the second defendant, seeking to recover the extra damages which would be recoverable at common law as against the second defendant. There is obvious force in that submission. On the other hand, it seems to me that the accident was in truth not properly investigated by the relevant authorities, as industrial accidents usually are in New South Wales. The first defendant took the view, expressed in its DCM statement, that it was not negligent. It apparently maintained that attitude until the commencement of the trial yesterday. 34 Weighing it all up, it seems to me that it is appropriate to order the first defendant to indemnify the plaintiff against the costs incurred by the second defendant up to and including 31 October 2000. With that in mind, I direct the second defendant that if the parties cannot agree about the measure of the second defendant's costs, the second defendant present to the plaintiff an assessment of its costs divided up into the periods up to and including 31 October 2000 and from 1 November 2000 onwards. FURTHER ARGUMENT AS TO COSTS 35 HIS HONOUR: I vary the order for costs which I made, that the first defendant pay the plaintiff's costs and, so far as concerns only the costs incurred by the plaintiff as against the first defendant, those costs are to be paid on an indemnity basis as from 19 November 1999. The costs which the first defendant is to pay the plaintiff by way of indemnification of the second defendant's costs will be on the ordinary basis. ********** Last Modified: 11/07/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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